Consider the hard facts. Two billion people on this planet do not have access to safe water, heath care, or financial services. A billion people do not have access to electricity. Two hundred and fifty million children do not have access to education or childhood immunization. The problems are immense and need speedy solutions. With public funds being limited the need for private investment in public areas is acutely felt. Impact investing expands the role of private enterprise in addressing the world’s most pressing social problems.

Impact investing is defined by The Global Impact Investing Network (GIIN) as: “investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.” Impact investing also goes by several other names – socially responsible investing, social investing, mission driven investing, responsible investing etc.

Impact investing is set to soar. Industry research suggests that approximately 2,200 impact investments worth $4.4 billion were made in 2011.This is almost doubling of investments from 2010. In India, the impetus is likely to come from the new Companies Bill (2012) that mandates 2% investment in CSR activities subject to certain criteria.